Valuing Ecosystem Services Makes Economic Sense, Experts Report

BRUSSELS, Belgium, November 16, 2009 (ENS) – Decision makers who factor the planet’s multi-trillion dollar ecosystem services into their national and international investment strategies are likely to see far higher rates of return and stronger economic growth in the 21st century, finds a new United Nations-backed report.

Prepared by The Economics of Ecosystems and Biodiversity, TEEB, an initiative hosted by the UN Environment Programme, the report advises policy makers to accelerate, scale up and embed investments in the sustainable management and restoration of ecosystems.

More than 100 science, economics and policy experts from around the world contributed to the TEEB for Policy Makers Report, which was co-ordinated by Patrick ten Brink of the Institute of European Environmental Policy in Brussels.

Hikers in Switzerland’s Appenzell mountains, August 2009 (Photo by McCharters)

“Nature’s multiple and complex values have direct economic impacts on human well-being and public and private spending. Recognizing and rewarding the value delivered to society by the natural environment must become a policy priority,” said Pavan Sukhdev, who serves as TEEB’s study leader.

Sukhdev is a senior banker at Deutsche Bank and a founder-director of the Green Accounting for Indian States Project, an initiative of the Green Indian States Trust.

At a news conference in Brussels Friday, Sukdev said, “The economic invisibility of ecosystems and biodiversity is increased by our dominant economic model, which is consumption-led, production-driven, and GDP-measured. This model is in need of significant reform. The multiple crises we are experiencing – fuel, food, finance, and the economy – serve as reminders of the need for change.”

“It is now up to governments to provide fiscal or other incentives to move us from short-term opportunism to long-term stewardship,” he said. “The right policies can help us move toward a resource efficient economy.”

“Losses in the natural world have direct economic repercussions that we systematically underestimate. Making the value of our natural capital visible to economies and society creates an evidence base to pave the way for more targeted and cost-effective solutions,” the report states.

Countries that have made the connection between ecosystem services and investment strategies are beginning to see benefits in terms of jobs, livelihoods and economic returns that outstrip those of economies stuck in older economic models, the study finds.

Visitor enjoys the Calakmul Biosphere Reservice in the Mexican state of Campeche, close to the Guatemalan border. (Photo by Mikel Omeyokan)

In Europe, one in every 40 jobs is now linked with the environment and ecosystem services – from clean tech industries to organic agriculture, sustainable forestry and ecotourism, the report finds.

In Venezuela, investment in the national protected area system is preventing sedimentation that otherwise could reduce farm earnings by around US$3.5 million a year.

In Guatemala, investment in the protection of the Maya Biosphere Reserve is generating an annual of income of close to US$50 million a year, has generated 7,000 jobs and boosted local family incomes.

In Vietnam, planting and protecting nearly 12,000 hectares of mangroves cost just over US$1 million but saved annual expenditures on dike maintenance of more than US$7 million.

The report precedes the UN climate conference in Copenhagen December 7-18, where governments are expected to agree on greenhouse gas emissions limits to take effect after 2012 and also give the green light to funding developing countries to maintain forests.

Roughly 20 percent of global greenhouse gas emissions are linked to deforestation, according to the Intergovernmental Panel on Climate Change.

The UN program known as REDD, for Reduced Emissions from Deforestation and Forest Degradation, aims to counter these greenhouse gas emissions while generating financial flows from North to South.

“It could open the door to more creative and forward-looking funds and mechanisms covering other nature-based infrastructure such as peatlands and wetlands en route to support for the services generated by coastal and marine ecosystems such as coral reefs to mangroves,” he said.

The report outlines a 10-point plan aimed at catalyzing a transition to more ecosystem-savvy economies.

Invest in ecological infrastructure.

Reward benefits through payments and markets.

Reform environmentally harmful subsidies.

Address losses through regulation and pricing.

Recognize that protected areas are a cornerstone of conservation policies and provide multiple benefits.

Halting deforestation and forest degradation should be an integral part of climate change mitigation and adaptation. It has the added benefit of preserving the huge range of services and goods forests provide to local people and the wider community.

Protect tropical coral reefs and the associated livelihoods of half a billion people through major efforts to avoid global temperature rise.

Save and restore global fisheries, which are currently under threat of collapse from overfishing.

Recognize the deep link between ecosystem degradation and the persistence of rural poverty and align policies across sectors with key Millennium Development Goals.

Agree to a forest carbon deal at Copenhagen.

Click here to view the executive summary of the report, “TEEB for Policy Makers: Summary: Responding to the Value of Nature.”